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The True Cost of Hiring
the Wrong Person

Targeted Selection:
Best Practices for new hires

Title: The True Cost of Hiring the Wrong Person

by Amogh Deshmukh

Every leader knows that hiring the wrong person for the job is a costly mistake. Why, then, does every organization end up hiring the wrong person?

The estimated average cost for every wrong hire for a company is in lakhs of rupees. This is actually the reason most organizations have a dedicated role for talent acquisition. And depending on the size of the organization, there could also be staff to hire frontline, mid- and senior-level employees.

Yet, somehow, even with these safeguards in place, hiring mistakes happen.

The issue doesn’t lie solely with talent acquisition teams. In many organizations, they are the most qualified to interview candidates and assess their strengths and weaknesses against the role. Leaders from outside of talent acquisition are often involved in hiring, however, and they don’t always know interviewing best practices.

There are many elements that add to the cost of hiring, from advertising to time commitments of the team for hiring and training the new hire. There are other costs, of course. Some are tangible, and some are not. One of the costs that’s often overlooked is the emotional stress for the manager and other employees who are responsible for the performance of the new hire.

So, why do mistakes happen in hiring? DDI’s monograph on Targeted Selection® speaks in detail about 20 common selection problems. These include human issues, process issues, and governance/education issues. Here are just a few:

Human Issues

  • Interviewers misinterpret applicant information.
  • Interviewers’ judgement is affected by biases and stereotypes.
  • Interviewers make quick decisions about applicants.

Process Issues

  • There is excessive overlap in competency coverage.
  • Interviewers ignore job fit motivation.
  • Selection elements are not organized into a system.

Governance/Education Issues

  • Applicants react negatively to the interviewing process.
  • Applicants aren’t sold on the advantages of the job, organization, or location.
  • Interviewers take insufficient notes during the interview.

Of these categories, Governance, Process, and Education are relatively easy to resolve. They must be set up in a way that variance from the standard can be monitored. However, there is still some significant effort the talent acquisition team has to make to keep these on track.

Most interviewers don’t want to admit that they really don’t know enough about interviewing. In fact, a vast majority of interviewers have very little training, with many having none at all. So, where did their interviewing skills come from? Likely from watching others interview, either by observing as interviewees or on panels with other interviewers. They saw things they liked that the interviewers were doing, so they chose to incorporate these things into their own interview style. How else would “Sell me this pen” become such a popular interview question?

There’s a debate in the HR world about whether interviewing is an art or a science. Most seem to believe it’s an art. However, at DDI, we believe it’s a bit of both.

Ten years ago, we introduced Targeted Selection® to the India and have trained hundreds of interviewers on both the art and science of interviewing. By using Targeted Selection® tools, interviewers can be sure to conquer the above mentioned selection problems by gathering unbiased, useful data on each candidate.

Learn more about how Targeted Selection® can revolutionize your hiring practices. Want to get an estimate cost of your wrong hires? Contact Amogh to discuss how you can save your company time and money.

As managing director for India, Amogh is responsible for the creation and implementation of the region’s business strategy, as well as all aspects of the DDI operations in India, which includes consulting, sales, marketing, and operations. He is an expert at providing counsel to a diverse range of both multinational and Indian organizations in the areas of leadership strategy, development, succession management, and talent acquisition. Read more about Amogh and connect with him here.

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